Live Cattle
The October Live Cattle contract opened (113.825) lower fell on Monday August 7, 2017, and then collapsed, trading down limit and ending the session at the lows. The rejection at the 200 DMA (115.325) on Thursday fueled the breakdown and the October contract has now made a new low (111.10) for the move, trading below the July 31st low (111.25). Support is at 110.80, Trendline support is at 109.80 and 107.75. The April 5 low is 108.675. Resistance is at 112.425 and 113.70. Producers were hoping for a positive start to the week in the futures market, looking for it to signal an uptick in the cash market this week. Last week’s cash ended up on a positive note on Friday and producers’ are hoping for continued improvement in price. Packers are still positive with their margins and expectations are for increased slaughter this week so they could pay up despite the break down in the futures market. However, there was some trading in the cash market on Monday and Live sales came in at a weak 116.00 and dressed from 184.00 – 186.00, lower than the 118.00 and 188.00 highs from last week. Monday afternoon boxed beef cutout values were lower on Choice and Select on moderate demand and light offerings. Choice was down .89 at 202.72 and Select down 0.31 to close at 197.00 on 111 loads. The choice/ select spread narrowed to 5.72. The estimated cattle slaughter for Monday was reported at 118,000.
Feeder Cattle
The September Feeder Cattle contract broke down and nearly went down limit making its low at 146.50. The failure at the 152.30 level (151.725 high) has created a lower high and a break down below 144.65 lead to a test of support at 141.20. The 100 DMA (146.05) is in the way and has previously stopped the selling. There is also trendline support at 145.425. Resistance is at 147.525 and then 149.975.
Lean Hogs
The October Lean Hogs has broken the 67.90 resistance level, trading up to the 200 DMA (68.575), reaching a high just below it at 68.525. A break out the 200 DMA could lead to a test of resistance at 69.90. Support is at 66.75.
For those interested I hold a weekly livestock webinar on Friday, August 11 at 3:00pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
**Call me for a free consultation for a marketing plan regarding your livestock needs.* *
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
www.walshtrading.com
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.